October 2011 Port Bureau News

Port Bureau News October 2011

www.txgulf.org

The Basics of Liquid Bulk Refining Processes CFATS—What does it mean for your facility?

Houston Chemical Terminals

Spotlight on George Pontikos Vice President, Port Operations—Odfjell USA

Houston Pilot Captain J.J. Hensley talks to tugs as he maneuvers a vessel off the dock.

Port Bureau Staff Bill Diehl Jeannie Angeli Al Cusick Cristina Gomez Janette Molina Patrick Seeba Josh Whitehead

Board of Directors *Tom Marian—Chairman *Dennis Hansell—1st Vice Chair. *Mike Drieu—2nd Vice Chair. *John Taylor—Secretary /Treas. *Robert H. Blades *Alec Dreyer *Charles H. Flournoy *Capt. Steve Conway *Capt. John G. Peterlin III *Capt. Richard Russell *Steve Stewart *Nathan Wesely Jim Black Ken Burnett Jan Crittenden Celeste Harris Jason Hayley Kevin Hickey Guy W. Hitt Charlie Jenkins Shareen Larmond Kathy Murray Jerry Nagel Vinny Pilegge Nolan Richardson Lloyd Schwing Tim Studdert Lawrence Waldron Armando Waterland Don Welch *Denotes Executive Committee Members

Photo Credit: Captain Lou Vest, Houston Pilots Assn.

Captain’s Corner 00

If you’re a regular reader of the Port Bureau News, a member of our maritime community, or have done business along the ship channel, you’re very familiar with the importance of American ports to our national economy. Away from the water this message seems to evaporate. So let me pose this question: if 1/3rd of our economy is associated with global trade and 95% of that tonnage is imported/exported through our ports, isn’t Middle America as invested in maintaining our ship channels as we are?

With over $285 billion of business a year associated with the Houston Ship Channel, our government is not spending the necessary $50 million a year in dredging needed to maintain it. They are spending in the mid $20 million range and we are silting in: 80% of our channel is not at design depth or width. Back in 1986, Congress established the Harbor Maintenance Trust Fund (HMTF) to fund dredging projects for our port. Businesses along the Houston Ship Channel pay into this trust fund $125 million annually and yet we still receive only 20 of the 50 million we need to maintain it. The extra money is accumulating in the trust fund, and it is has a current balance of $6 Billion.

At the Port Bureau we are big supporters of Congressman Boustany’s (R-South Louisiana) H.R. 104 – The Realize America’s Maritime Promise (RAMP) Act. The RAMP Act guarantees the funds collected annually by the Harbor Maintenance Tax are allocated by Congress for the sole purpose of dredging and maintenance. Since this bill addresses program-wide funding, not specific projects, it is not considered earmark legislation. The Congressional Budget Office (CBO) has also confirmed the RAMP Act does not add to the deficit. The bill has bipartisan support with 126 cosponsors in the House and 26 in the Senate. But momentum for it is stalled because our inland legislators see our coastal problems as our problems. What they fail to realize is if traffic slows through our ports, then their factories, farms and job growth will slow too. Think back to the 1/3 of our economy is tied to global trade.

Let me give you a different example: China. From 2000-2005, the Chinese road network grew by 15% while their rail network grew by 10%. They doubled their national oil and gas pipeline infrastructure and developed, built, and opened a number of new ports—not terminals, mind you, ports. More than that, they had a national infrastructure plan that looked ahead to realize that Worlds Biggest Ports (Tonnage) - 2009 they needed to keep growing as the decade progressed.

Million Rank Port Country Tons What was the result? In 2002, Houston was the 6th largest 1 Shanghai China 505.7 port in the world, moving 161 million tons of cargo a year across our 2 Singapore Singapore 472.3 local docks. By 2009, the money poured into infrastructure improve3 Rotterdam Netherlands 386.9 ments in East Asia meant that seven of the top ten ports in the world are now Chinese, and Houston—even with an almost 20% increase in 4 Tianjin China 381.1 cargo movement, dropped to number thirteen. Not content to rest, 5 Ningbo-Zhoushan China 371.5 the Chinese stimulus package of 2009 invested over $220 billion USD 6 Guangzhou China 364.0 (38% of the total package) into infrastructure improvements. By com7 Qingdao China 274.3 parison, the 2009 US stimulus package only invested about 6% of our 8 Qinhuangdao China 243.8 stimulus in transportation.

9 Hong Kong China 242.9 President Obama wants to double exports in five years; this is a 10 Busan South Korea 226.1 good thing for us as a nation, but how are you going to do it without 11 Dalian China 204.0 maintaining our ports? Private industry is stepping up to the plate. Lat12 South Louisiana USA 192.8 er in this issue, you will read about Port Bureau members like Houston 13 Houston USA 191.7 Fuel Oil, Exxon and Intercontinental Terminal Company expanding their Worlds Biggest Ports (Tonnage) - 2002 facilities—increasing their capacity to meet future challenges. At the Million same time, the Port of Houston Authority is working with the Tier I railRank Port Country Tons roads serving Houston and the PTRA to expand rail capacity so that we 1 Singapore Singapore 335.1 are better able to get American goods to our port for export. Finally, 2 Rotterdam Netherlands 321.8 Shell Deer Park Refinery is among the facilities that recently finished 3 Shanghai China 238.6 major renovations which allow the site’s two ethylene plants to run on 4 South Louisiana USA 196.4 mixed feed slates—now the crackers can use lighter and cheaper natu5 Hong Kong China 192.5 ral gas to produce plastics and resins, making American plastics and 6 Houston USA 161.9 resins competitive in the world export market.

7 Chiba Japan 158.9 As industry, we’re preparing for the future. But without politi8 Nagoya Japan 158.0 cal support, we will find ourselves quickly marginalized by a silted in 9 Gwangyang South Korea 153.4 port. Please support RAMP Act language as a path to increase global trade, federal revenues, and our domestic workforce.

10 Ningbo China 150.0

Refining 101

Products and Processes

With more than 863,000 employees in the United States generating over $664 billion in revenue, the petrochemical industry is responsible for over 70,000 diverse products which encompass everything from clothing to tires, paper to metals.

But where does it all start? In Texas, we generate 4.1 million barrels/day, providing about 22.8% of the total US crude oil refining capacity—with much of that along the Houston Ship Channel with the Valero, Pasadena Refining, Marathon Petroleum, Houston Refining, ExxonMobil, Deer Park Refining, and BP Products facilities.

An essential part of the downstream oil industry, oil/petroleum refineries are processing plants where crude oil is refined into products such as gasoline, fuel, heating oil, kerosene, and liquefied petroleum gas. Oil refineries are often large, complex facilities, with miles of pipeline networks for oil transport. Oil refineries use much of the same technology as chemical plants – with a bulk liquids terminal near the refineries, processed products can be stored and transferred.

The basic oil refining process is simple: crude oil (petroleum) is boiled in a closed atmospheric distillation system until it evaporates and is fed into a cooling tower. Because each component of the vapor has a different temperature at which it returns to a liquid, the vapors condense into trays stationed at different levels so that the chemical components are sep-

Courtesy of the US DOE Energy Information Administration

Visualize the Refining Process

arated and moved to the next stage of the refining process. With the condensation, the crude oil is now a series of disparate semi-raw materials that can be used as feedstock.

After initial distillation, the feedstocks may be routed to various different units depending on their chemical makeup and the final product desired. The heaviest residual oil that doesn’t vaporize is pumped to a coking unit where it is further

heated, undergoes thermak cracking and the oil decomposes under extreme heat, becoming petroleum coke, naptha for reforming, butane, and other heavy oils.

Some gas oils created in the initial distillation are moved to a fluid catalytic cracking unit where heat and other catalysts are used to break down the heavy oil into low quality diesel stock, heavy fuel oil (slurry), and gasoline feedstock After the coking and catalytic cracking processes complete, some residuals are sent to an alkylation unit where they are combined to form feedstock for a high -octane gasoline blend. Another unit that increases the gas feedstock octane level includes the catalytic reformer unit, which uses moderate pressure to change the molecular structure of feedstocks such as napthas. To remove impurities, a desulphurization process uses high pressure heat and other catalysts to remove nitrogen and isolate sulfur, and hydrotreating binds hydrogen to the sulfur and nitrogen molecules to make them workable. This is different for hydrocracking which breaks diesel stock using extremely high pressure, heat, hydrogen and other catalysts to rework the material into gasoline blends.

While refineries generally have diversified feedstock capabilities and are able to refine both crude oil and natural gas, the recent decoupling of feedstock prices (between oil and gas) has led some area refineries to switch their feedstock ratio to utilize natural gas more than was previously serviceable. With gas production growing, North American petrochemical markets are showing competitive cost advantages with the combination of increasing domestic gas sourcing, chemical plants and oil refineries able to productively use natural gas feedstock, and new technologies available both for bringing feedstock out of the ground and working the gas into chemicals and refined products.

Oil Refineries vs. Chemical Plants: What’s the Difference?

Though different facilities, chemical plants are most situated adjacent to large industrial oil refineries in order to utilize the products of the oil refining process. During the chemical processing, various feedstocks are further transferred to processing plants where they are made in to products such as plastics or agricultural chemicals. Like crude oil, chemicals are refined by adding heat, pressure, using catalysts, or by using other chemicals to induce reactions and change the molecular structure of the feedstock. –P. Seeba, GHPB.

Refinery Products #6 Oil

Uses Tanker fuel, power generation, locomotives

Asphalt

Road construction and roofing materials

Chemical Feedstock

Ethane, propane, butane

Diesel fuel

Trucking, heavy machinery

Distillates

Jet fuel, diesel

Gas

Refinery gas, propane

Gas oils

Heating oil, chemical feedstock

Gasoline

Regular, premium unleaded, low sulfur gasoline

Heating oil

Furnaces

Jet fuel/Kerosene

Commercial/military aviation

Lubrication

Oils, waxes

Naphthas

Fluids, gasoline

Propane and Butane

LPG for domestic and industrial uses

Residuum

Coke

Chemical Products Benzene Acetone Benzene Bromobutyl Butene-1 Butyl Ethylene/Propylene Exxpro Isobutylene Isoprene/Butadiene Orthoxylene Paraxylene Piperylenes/Dicyclopentadiene Polypropylene Propylene Solvent Xylene Solvents Sulfur Toluene

Uses Styrene, synthetic fibers, aspirin Industrial solvents, plastics Chemical and plastics raw material Tires, pharmaceuticals Polyethylene, chemicals, plastics Inner tubes, tires Plastic, polyester, insecticides, detergent Adhesives, auto body mounts, wire, cable Butyl rubber Latex paints, rubber, adhesives, tapes Chemical and plastics raw material Polyester fabric, plastic bottles Tapes, printing ink, boat hulls Medical supplies, auto interiors, carpets Polypropylene, chemicals and plastics Paint, lacquer solvent Surface coating, ink, pharmaceuticals Rubber vulcanization and explosives Medicines, explosives, dyes, paints

Liquid Bulk Terminals

Port Bureau Members Moving Oil and Petrochemicals

ExxonMobil ExxonMobil is the world’s largest refiner of gas and oil products, and has grown to become the largest publically traded petroleum and petrochemical company in the world. Producing about 3% of the world’s oil and 2% of the word’s energy, ExxonMobil gives special focus to technology, and was the first to use wet gas scrubbers to reduce emissions.

The ExxonMobil Baytown refinery, encompassing over 3,400 acres and employing approximately 4,000 employees and contractors is the largest refinery in the United States. Supplied by tanker and pipeline, through five ship berths and nine barge slips (barge slip availability varies by configuration), ExxonMobil Baytown is capable of refining 573,000 barrels per day producing a full range of petroleum products including gasoline, lube oils, waxes, and hydrocarbon fluids as well as various blends and grades of specialty products.

The Chemical Plant, manufacturing over 7.2 billion pounds of petrochemical products every year, purifies refinery propylene, and recovers aromatics from reformate and napthas as well as butylene from BOP for butane-1 production. These goods get to market by truck (minimal), barge (50%), pipeline (25%) and rail (25%). ExxonMobil Chemical recently announced the addition of 50,000 tons/year metallocene polyalphaoletin capacity, a highviscosity synthetic lubricant base stock which will begin operations in 2013.

Houston Fuel Oil Terminal Co. As the US Gulf Coast's largest black oil facility, Houston Fuel Oil Terminal Company operates approximately 14 million barrels of oil storage capacity. Its four ship docks can unload at rates up to 6,350 cubic meters per hour on it's over 300 acres of Houston Ship Channel property. Houston Fuel Oil is able to store and blend fuel oil and crude oil for further distribution via its 16 and 24 inch pipelines, four ship docks, 19 barge spots, 11 truck spots and 30 rail spots.

HFOTCO has plans to add another 5.2 million barrels of residual oil storage capacity, of which 2.2 million barrels and 20 rail spots are currently under construction, with completion expected in late 2012. HFOTCO’s new #4 ship dock was completed in July of this year and can handle vessels up to 900' x 165' with drafts up to 45'.

Intercontinental Terminal Company The Intercontinental Terminals Company is a forty year old organization with a history of chemical, petroleum, and gas storage in Houston and Louisiana. With 225 tanks in Houston and a total storage capacity of 11.3 million barrels, spread over 265 acres, ITC’s Deer Park facility offers customers connections and convenience so their chemicals are taken care of.

ITC offers a complete line of terminaling capabilities including in-storage product blending, vapor recovery systems, semi/fully refrigerated systems, product heating and circulation, vessel/barge layberth accommodations, railcar storage, and packaging/blending customization. With six tanker berths accommodating up to 45’ draft, and ten barge docks ITC is able to move products off the vessel to a storage tank, then deliver to customers using tank trucks, rail connections including a 550 private storage spur, or brown/ blue water movement.

ITC’s regional expansion includes new work to build a new 180 acre petroleum and petrochemical terminal in Pasadena, as well as work on a new facility at the Port of Antwerp which began terminal operations in October 2010.

KinderMorgan With more than 37,000 miles of pipelines and 170 terminals in North America, Kinder Morgan is in the business of transporting, storing and handling energy products for its customers. In the Houston region, Kinder Morgan’s liquid-bulk facilities combine to store over 26 million barrels of petroleum and segregated chemical products.

Utilizing 278 tanks over three terminal facilities at Galena Park, and Pasadena, Kinder Morgan’s liquid bulk operations load tank trucks, barges, pipelines and deepwater vessels with product and have the ability to blend, test, handle additives and injections and a wide range of specialized services from vapor recovering/ incineration to nitrogen blanketing and heating/chilling.

LBC Houston As one of the world’s largest storage companies for chemical products, LBC Tank Terminal group operates terminals through Europe, the United States, and China. LBC’s Houston terminal has storage capacity for nearly 4.5 million barrels of chemicals, feedstock, and petroleum products which connect by rail, water, road and pipeline to customers especially in nearby chemical plants.

From blending and compounding of many ranges of technical additives and compounds such as de-icing and heat transfer fluids, concrete additives and coolants, to drumming and IBC filling, warehousing of hazardous packed goods, and container and railcar cleaning, LBC offers a widerange of value added services to customers. Recently, LBC opened a biodiesel plant in Houston which produces 30 million gallons a year of fuel from raw materials including soybean and vegetable oils.

Odfjell Terminals Houston Odfjell is a leading company in the global market for transportation and storage of bulk liquid chemicals, acids, edible oils and other specialty products. Owning and operating chemical tankers in global and regional trades, Odfjell also operates a network of tank terminals and is able to maximize fleet utilization through economies of scale while providing safe and efficient deep-sea operations.

Odfjell USA (Houston) Inc. offers both agency and shipping services handling all manner of chemicals and petroleum products. With Odfjell Terminals Houston (OTH) a total terminal capacity of over 2 million barrels spread over 100 tanks (including 31 stainless steel), Odfjell prides itself on its accessibility and sophistication. Odfjell’s two deep-draft ships wharves and four barge docks are complimented by 14 truck stations, stainless steel rail-header systems enabling loading/unloading of up to 120 rail cars on 8 tracks.

Oiltanking Partners, L.P. As one of the world’s leading independent companies for the storage of gas, oil, and chemicals Oiltanking operates a Houston facility with over 11 million barrels of storage capacity allowing access to refined products, crude oil and petrochemical pipeline systems that can accommodate customers’ most complex marketing and distribution programs.

Oiltanking’s infrastructure includes six ship docks and two barge docks accommodating vessels up to 130,000 DWT and 45’ of draft with access to tank trucks, railcars and pipelines from the docks. In addition, Oiltanking’s handling of crude and fuel oil, LPG, refined products, and chemical feedstocks are complimented by its Foreign Trade Zone status, vapor recovery, heating, mixing/blending, and bunkering capabilities.

Shell Operating in over 90 countries and all 50 US States, Shell is a global corporation of energy and petrochemical companies. With over 22,000 US employees, and more than 2,000 employees and contractors in Houston Shell’s businesses include upstream, downstream, and projects and technology.

The Shell Deer Park Refinery is the company’s largest and the sixth largest overall in the United States.

Capable of processing 340,000 barrels of heavy sour crude every day, the refinery produces gasoline, aviation fuel, ship and utility fuels, and furnace oil/diesel. On site, Hexion Specialty Chemicals operates a resins operation, Oxy Vinyls produces chloride monomers, Air Gas handles CO2, and Kinder Morgan distributes pet coke.

In addition to the refinery operations, the Shell Chemical plant manufactures base chemicals that are later transformed by other companies into consumer products from plastics to building materials. These chemicals, ranging from ethylene, propylene, and dicyclopentadiene to benzene, xylene, phenol, and acetone, are distributed through Shell’s access to regional pipeline networks, barge, rail, or over one of the facility’s five ship berths.

Targa Resources Established in 2003, Targa Resources is a provider of midstream natural gas and natural gas liquids services.

The company is focused on growth, and offers gathering, processing, treating, fractionation, storage, and transportation services for gas products. Targa sells raw and component natural gas liquids to refining and petrochemical companies. The company operates in many areas in the country, including the Gulf Coast, the Gulf of Mexico, Mid-Continent, and Rocky Mountain regions.

Vopak With over 5,700 employees, and a 21% market share in the oil and chemical storage business, Vopak is one of the world’s leading independent providers of storage and handling of liquid oil, chemical, and liquefied gases. With two terminals in Houston, Vopak Deer Park and Vopak Galena Park offers almost 8 million barrels of storage capacity for chemical and petroleum products.

Vopak’s 334 Houston storage tanks range from mild, coated, and stainless steel to spherical and can accommodate up to 80,000 barrels.

With 5 ship berths, 18 barge slips, and connections to truck, rail and pipelines, the terminals are hubs for import/export and distribution.

The Deer Park terminal, a full service facility, offers heating, nitrogen blanketing, vessel to vessel transfer, direct discharge to tank car/truck, steam heat capabilities, and a host of other amenities.

(top-left): Networking continues at the chow line (upper-left): Members and professionals network before the luncheon (middle-left): Robert Sakowitz, Hazak, and Ken Burnett, Watco Companies/Greensport Industrial Park (lower-left): Vinny Pilegge, Manchester Terminal, Capt. Steve Conway and Capt. Mike Morris, Houston Pilots (bottom-left): Animated discussion (bottom): Mayor Parker fields questions from the Commerce Club (bottomright): David Halbert, Houston Mooring, Bob Lain, Moran-Gulf Shipping, and Pete Simons, Port of Texas City (lower-right): CAPT Jim Whitehead, USCG, Mary Barnes and John Kendall, Houston Maritime Museum (mid-lowerright): Bill Diehl, GHPB and Councilman Mike Sullivan, City of Houston (mid-upper-right): Charles Flournoy, John L Wortham & Son, Jim McGregor, Ocean Shipholdings, and Capt.

Marcus Woodring, Port of Houston Authority (upper-right): Bob Blades, Blades International, and Kevin Hickey, Houston Fuel Oil Terminal flank an industry professional at the luncheon (top-right): Members and professionals network before the Commerce Club luncheon

Chemical Facility Anti-Terrorism Standards—CFATS CDR Robert Acker, USCG (Ret.)

Threats to Energy Tankers

The Chemical Facility Anti-Terrorism Standards (CFATS) Interim Final Rule, published April 9, 2007, establishes a risk-based approach to screening and securing chemical facilities determined by the U.S. Department of Homeland Security (DHS) to be “high risk.”

Each covered facility must select, develop in their Site Security Plan, and implement appropriately risk-based measures designed to satisfy the risk-based performance standards (RBPSs) identified in 6 CFR 27.230.

CFATS requires chemical facilities to provide DHS with information to determine whether they present a high-risk and therefore are required to implement security measures that meet applicable What Types of Facilities Have to Comply with RBPSs. When DHS talks about a tier, they refer to the risk level associated with a facility covered under CFATS and the classification assigned to a facility by the Department. Certain chemical facilities pose higher security risks than others due to the dynamic nature of the chemical industry, their processes, and other factors, so rather than apply a one-size-fits-all regulatory approach, DHS has established a risk-based approach that takes into account the varying levels of consequence, vulnerability and threat that facilities present. This approach allows the facilities to establish an appropriate set of security measures commensurate with their specific risks.

By establishing risk-based tiers, each facility will be able to selectively implement security measures that are commensurate with the level of risk posed by that facility. The risk-based tiering structures also allow the Department to prioritize its efforts on the highest risk facilities.

At Least Some Provisions of CFATS?

Chemical Manufacturing, Storage, Distribution Energy and Utilities Agriculture and Food Paints and Coatings Explosives Mining Electronics Plastics Universities and Research Institutions Healthcare and Pharmaceuticals

DHS makes a preliminary determination as to a facility’s placement in a risk-based tier based on data submitted by the facility using the Chemical Security Assessment Tool (CSAT). This computerized process developed by DHS in conjunction with Oak Ridge National Laboratory is based largely upon consequence modeling data for the facility.

For a facility that the Department initially determines to be high-risk, the Department will place the facility into one of four preliminary risk-based tiers ranging from Tier 1 (highest-risk) to Tier 4 (lower-risk). Facilities that are not considered highrisk are notified of that determination and are not required to comply further with CFATS. After initial screening, the CFATS regulation then requires each preliminary high risk facility to submit a Security Vulnerability Assessment (SVA). The SVA collects more in-depth information about the facility that allows DHS to assign the facility to a final risk tier. This in-depth information allows for the calculation of vulnerability, consequence and threat values (including data held by the Federal Government). Based on an assessment of the information a facility submits to DHS, including information submitted through the CSAT Top-Screen, the Department will make an initial determination on whether the facility is considered highrisk. DHS uses risk assessment computer programs to help DHS identify facilities that are high-risk.

DHS reviews the SVA to determine whether it continues to consider the facility to be high-risk, and if so, will issue the facility a final tiering determination. The final tier drives the facility’s se-

lection of security measures in the facility's Site Security Plan necessary to satisfy the RBPSs. Various factors are considered in making both preliminary and final tiering determinations, including potential risk to human health and national security from a successful attack on the facility. DHS’s tiering algorithm is classified, but the presence or quantity of a particular Chemical of Interest (COI) listed in 6 CFR Part 27, Appendix A is not the sole factor in determining a facility’s tier. COIs must exist in quantities at or above the applicable Screening Threshold Quantity (STQ), and present to one or more security issues: release, theftdiversion, and/or sabotage-contamination.

The covered facility will receive written notification of the Department's preliminary determination of the facility's placement in a risk-based tier. Unless otherwise notified, a covered facility must complete and submit a Security Vulnerability Assessment (SVA) within 90 calendar days of written notification from DHS. The SVA is designed to identify and assess the security of a facility’s critical assets in light of the security issues raised by DHS in the preliminary tier determination letter. Following review of a covered facility's SVA, DHS notifies the covered facility of its final placement within a risk-based tier, or for

covered facilities previously notified of a preliminary tiering, confirm or alter such tiering.

The covered facility will receive written notification of the Department's confirmation or alteration of risk-based tiering (final determination of high-risk letter). The Submitters that receive a notification then access the DHS communication electronically via the CSAT Portal. Unless otherwise notified, a covered facility must complete and submit a Site Security Plan (SSP) within 120 calendar days of written notification from DHS or within the time frame specified in any subsequent Federal Register notice. A facility’s SSP will be tailored to its specific tier level, security issues, risks, and circumstances, as determined by DHS review of its SVA. DHS will inspect high risk chemical facilities at regular intervals with higher-tiered facilities being inspected first and more frequently. DHS may also inspect a high risk facility at any time based on new information or security concerns.

Chemical-terrorism Vulnerability Information (CVI) is a new program created by the CFATS regulation to protect information created or maintained under the regulation. Access to CVI requires proper training and the “need to know.” The submitter must be an authorized user, and CVI numbers must be associated with individual CSAT user accounts. To access communications regarding Risk-Based Tiering, the submitter must log into the CSAT portal at https://csat.dhs.gov/csat using the authorized CSAT username and password. CVI training can be accessed at http://www.dhs.gov/chemicalsecurity.

The CFATS Personnel Surety Program provides high-risk chemical facilities with the mechanism to implement security measures to ensure that certain individuals are subject to screening for ties to terrorism. CFATS requires high-risk chemical facilities to perform a minimum of four (4) types of background checks on facility personnel with access to a chemical facility’s restricted areas or critical assets, and facility visitors with unescorted access to a chemical facility’s restricted areas or critical assets.

1) background checks designed to verify identity 2) background checks designed to check criminal history 3) background checks deigned to verify legal authorization to work in the United States, 4) background check to identify people with terrorist ties.

DHS hosts CSAT-SSP webinars every Wednesday from 2:00 to 4:00 PM EST. Any final tiered facility with a pending SSP may register up to five persons to participate in one or more of these weekly webinars. The webinar consists of a detailed briefing on the SSP tool functions, questions, and considerations. Participation requires a high-speed internet connection and phone. To request a reservation for the webinar, please submit an email to cfatsssp@absconsulting.com. Once registered, an email with the designated webinar date and connection information will be provided. Reservations are made on a first-come, first-serve basis.

If you have further questions, the online CFATS Knowledge Center provides information, articles and current information as well as provides links for users to register, conduct the top-screen to establish tiering, submit SVAs and SSPs, schedule inspections, initiate personal surety checks, register for CVI access, and obtain detailed information on COIs. Access is available at: http://csat-help.dhs.gov/.

CDR Robert Acker, USCG (Ret.) is an environmental health, safety and security consultant specializing in security vulnerability assessment plan evaluations, domestic & international transportation security, response, operations and partnerships. With nearly thirty years of security and response experience, he has provided transportation security consulting for more than 50 domestic and international clients. He has conducted ship and refinery security vulnerability assessments, audits, training and preparedness activities at international locations including Spain, Mexico, Guatemala, China, Korea, the Netherlands, Canada, Mexico, Brazil, UAE, UK, and Panama. He led a team of professionals reviewing plans for the US government during the implantation period of the Maritime Transportation Security Act (MTSA). Bob holds a Graduate Certificate in Homeland Defense from the University of Colorado at Colorado Springs.

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Port Watch

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The Uncertainty of it All

Sometimes the best way to make sense of what was is to look at what is. With that in mind, the Fed is trying to prod the economy forward, businesses are hesitant to expand, and that omnipresent economic gauge – the consumer – remains hunkered down in the savings mode wary of what the future will bring. Closer to home, things on the waterfront do not appear to be much better as the late September-October inventory surge does not appear to be materializing. In essence, as September appears to be sputtering, August was!

Overall, August continued last month’s downward trend, albeit there were some bright spots. The Port of Houston finished the month down by over 4.5% but, interestingly enough, the private docks experienced all of the decline with a monthly drop of 6.5%. In fact, only four of the 17 “double-digit” private terminals (i.e., those that typically see more than 9 vessel arrivals a month) recorded a greater number of arrivals in August as compared to July. Meanwhile, the cumulative ship arrivals at the public docks were unchanged at 202 with some pretty impressive gains at the City Dock infrastructure where Ro-Ro and General Cargo vessels call. This and the fact that there was an 11% increase in the number of Chemical vessel arrivals demonstrates that export activity remains robust in the nation’s number one foreign vessel arrival port.

In the energy realm, the volatile and rather soft energy market manifested itself in a 9% decrease in tank vessel arrivals and a substantial 17.5% decrease in LPG vessel arrivals. Texas City bore the brunt of the energy stall registering 20% less vessel arrivals in August. Conversely, the Port of Sabine’s arrival number notched up 7% in August. The good news is that both ports are up more than 6% in terms of vessel arrivals for the year. The Port of Freeport also escaped August’s energy import malaise with a 13% monthly increase. Although this was not quite enough to bring the port into positive territory for the year as it remains 2.5% off 2010’s arrival numbers.

Rounding out the coastal ports, both Corpus Christi and Galveston ended the month with double-digit gains of 15%. To date, these two ports are up for the year by 12% and 6% respectively. Again, this appears to be consistent with the continued positive export market that has been dominating the region. Combined, Texas ports were down nearly 2% for the month. Fortunately, the brownwater fleet eked out another monthly gain as 3% more tows plied the Houston Ship Channel with a wide variety of cargoes.

All things being equal, August was not a particularly poor month given that trade historically takes a pause before the Christmas imports head to Texas shores. Nonetheless, the sense is that things on the maritime trade front have not been regrouping in September. Worse yet, the October shipping look-ahead does not reflect a simple delay as nothing significant in terms of vessel arrivals appears to be on the horizon. Candidly, there are too many variables out of sorts that permits certainty to return to the overall trade picture. If this picture was a little more negative there would be certainty that the economy was stuck in the doldrums in this part of the country. Conversely, if things were a bit more positive, the final quarter would set the stage for an even better 2012. At present, all that is certain is the uncertainty of it all.

Spotlight on George Pontikos

Vice President, Port Operations—Odfjell

Born in Pireaus, Greece in 1958, there should be no surprise that Captain George Pontikos entered the maritime industry. “My parents—they came from a shipping island near Turkey, and when I was growing up, everyone around us was always “Captain” or “Engineer” of the merchant marines. I even had a couple of uncles that had small ships, so we were always around the water, always around the shipping business.”

Growing up in Filothei—a northern suburb of Athens—George went to public school for elementary and high school, but in the summer of 1976, he started sailing as a deck boy on a bulk carrier moving from Eleusis, Greece to Norfolk, VA loading wheat for Iran, and heading back to the Mediterranean. George didn’t make it all the way though—when the vessel stopped in Sicily for bunkers, he had to disembark so that he could go back to school.

At the Merchant Marine Academy of Aspropyrgos—the Hellenic equivalent of King’s Point in the United States— George got his formal education, but like many European countries, when he left school, and after getting his 2nd officer diploma, the military came calling, so George began his 2+ year mandatory service in the Greek Navy. After basic training, he served six months on a landing vessel and sixteen on a minesweeper.

While Greece changed, George was at sea: though he got out of the Navy in 1982, he kept sailing with dry cargo and tankers starting as a deck boy and working his way up the ranks from apprentice to officer, second officer, chief officer, and captain on ships ranging from bulk and general cargo carriers to tankers, crude oil carriers and chemical ships. Reflecting on his time at sea George remarked, “I didn’t do Ro/Ro, and I didn’t do cruise/passenger ships… but I did almost everything else”.

During his time at sea, George sailed aboard the Kapetan Giannis—known originally as the Esso Atlantic—a 516,891 DWT tanker.

Sailing for Carras Hellas then Ceres Hellenic, and for a couple of smaller companies, George saw his share of trouble at sea. “I was very lucky—we never had a death on board ship, no major accidents, no sinkings or abandon-ship situation, but I did have several experiences with terrible weather on all three major oceans: Atlantic, Pacific, and Indian.” Explaining, “In the winter in the north-Atlantic, we had very bad hurricane-force winds coming from northern Europe, heading south towards Florida, on the way to New Orleans, that was probably the worst weather I’ve ever seen, and we were almost completely empty. Sitting high in the water, we were just being thrown one way to the other.”

“Another bad weather experience - we were in the Mediterranean north of Libya, and we experienced heavy northern winds as we drove east towards Turkey, so we had to heave up to ride out the storm— that time, it wasn’t so bad a storm, but our deck cargo was a load of steel pipe—not something you want rolling around on you.”

In 1990, George came ashore as a Marine superintendent with Ceres Hellenic, and in 1991, George moved to Houston “permanently” as a port operator for the Chemical division of Ceres Hellenic , SeaChem which was bought by Odfjell in 2000.

As the VP of Port Operations for Odfjell, George is responsible for all Odfjell Tankers activities in Houston, the State of Texas and the USA, in general.

George met his wife Katheryn in Greece in 1984, and they were married in 1988. Their son Michael was born in 1992 in Houston and he is currently studying biochemistry at the University of Oxford in the UK. When George finds free time, he enjoys sailing and tinkering with computers.

Odfjell is a leading company in the global market for transportation and storage of bulk liquid chemicals, acids, edible oils and other specialty products. Owning and operating chemical tankers in global and regional trades, Odfjell also operates a network of tank terminals and is able to maximize fleet utilization through economies of scale while providing safe and efficient deep-sea operations.

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Upcoming Events October 1

US Coast Guard Industry Day Alvin D. Baget Community Center, Galena Park

November 7

Captain’s Cup Golf Tournament Brae Burn Country Club

GREATER HOUSTON PORT BUREAU 111 East Loop North Houston, TX 77029 713.678.4300 ph 713.678.4839 fax www.txgulf.org